Antitrust adviser Joe Biden has warned of a “profusion of junk fees” in the US economy, as he pushes to expand the war on hidden fees to include those affecting investors in the securities market.
In an interview with the Financial Times, Team WuBiden administration adviser on competition policy, said there is “a sense of profusion of junk costs throughout the economy, things that confuse people, coercive costs, deceptive practices”.
He added that this is “a perfect area for the whole government . . . approach” to shock the costs that unexpectedly inflate prices.
Wu’s comments come as the White House has begun working with the Securities and Exchange Commission to bring the charges of junk in the securities market into the “broader mandate” of the competition board, which was launched by Biden to help reduce market concentration.
Made up of the heads of several federal agencies including the SEC, the council is responsible for implementation executive order signed by the president last year to curb corporate power in the US economy, from transportation to technology and banking.
Wu, the architect of the order, is part of a new generation of progressive antitrust officials – including Jonathan Kanter, the head of the Department of Justice’s antitrust division, and Lina Khan, the chairman of the Federal Trade Commission – appointed by Biden to fight anti-competitive practices in American companies.
Among the tasks of the competition council is to understand how waste costs are manifested in different industries and to reduce these hidden costs, an initiative championed by Biden in a speech just days before the midterm elections.
After presenting new guidelines from the Consumer Financial Protection Bureau, which focuses on unfair prices, to curb illegal “surprise” bank charges, Biden warned: “We have just started. There are tens of billions of dollars in other garbage charges in the economy, and I have ordered my administration to reduce or eliminate it.
An SEC official said the agency has presented several initiatives to the competition council, adding that the regulator is more focused on the disclosure of the expanding fee than imposing an outright ban.
The measures include an SEC proposal announced in February to increase disclosure of fees charged by private funds to investors, and amendments to rules adopted in October that require funds to clarify shareholder reports and present transparent and balanced information in advertising materials, officials said. .
The SEC is working with brokers and advisors to be more aware of their recommendations to retail investors, officials said, for example considering account fees and transaction fees when making recommendations to clients.
Wu said securities regulations offer “low-hanging fruit” to boost prices, a sign that the White House is expanding its fight against wasteful fees from consumer-facing companies, such as airlines and banks.
But he added that there are “other possibilities” to challenge hidden costs in the securities market beyond existing SEC initiatives. He said the White House is in the “early stages” of assessing what the potential costs and remedies in the securities space will be.
Wu pointed to healthcare and shipping as other areas where prices should be reviewed. “The main problem in health care is that you don’t have many prices. . .[but rather issues]like a surprise bill where people suddenly have a $15,000 bill that they didn’t expect to show up. In the shipping industry, meanwhile, the regulator has been proposed rule requiring operators and marine terminal operators to clarify billing practices.
“The general idea is to clean up prices in the United States,” Wu said. “We want to develop almost a jurisprudence of pricing or garbage charges that agencies understand and have a playbook to work with.”